Do You Need A Commercial Umbrella Insurance Policy?

We answer who needs a Commercial Umbrella Insurance policy.

As a business owner and especially as we move through the COVID-19 pandemic, you know things can happen in the blink of an eye that can change the course of you and your business. Often times, many business owners believe they already have everything they need when it comes to insurance, but the truth is many of your policies only cover your business for a certain number of exposures. There may be gaps in your policy, causing your business to have to pick up unexpected fees during a claim. Your Commercial General Liability Insurance policy is crucial to protecting your business, but it won't keep you dry in every storm. That's where having a Commercial Umbrella Insurance policy can help your business; let's discuss how it works and who needs Umbrella Insurance.

What is Commercial Umbrella Insurance?

Commercial Umbrella Insurance can act as an extra safety net for financial security by covering unexpected, additional costs. Umbrella Insurance can fill in the gaps between coverages and takes the reins when the coverages on your existing policies are fully used up.

Commercial Umbrella Insurance can usually be applied to your:

• Commercial General Liability Insurance (CGL)

• Commercial Auto Insurance

• Professional Liability or Errors & Omissions Insurance (E&O)

• Employer's Liability Insurance

When Do You Need Commercial Umbrella Insurance?

Here's a scenario to help explain when would you need Umbrella Insurance:

You own a coffee store and one of your employees accidentally pours fresh, hot coffee on a customer's hand while serving them. The customer's hand is severely burned; she sues your business for the medical fees and inability to work with her injury. She wins and is eligible to receive $1.2 million; however, your Commercial General Liability can only cover $1 million. Without your Commercial Umbrella Insurance policy, you would have to pay the $200,000 out of pocket or through your business. Because you have an Umbrella Insurance policy, you are able to pay the remaining $200,000 using the coverage.

Why Would You Need A Commercial Umbrella Insurance Policy?

As seen in the example above, without the Commercial Umbrella Insurance, the coffee shop owner would have to pay the extra expenses, that are not covered by their insurance, using their own finances or the business' finances. If you already have or are considering Business Insurance, you know the importance of peace of mind and protecting your business from the unexpected. As previously mentioned, Umbrella Insurance acts as an additional safety net if there is a gap in coverage or if there is an extra cost in liability. It can be difficult to predict when either may occur but by having Umbrella Insurance, you know you are prepared. For many, especially small businesses with less resources, having to pay out of pocket can mean closing the doors of their business.

Who Should Have A Commercial Umbrella Insurance Policy?

You may be wondering, "What businesses need Umbrella Insurance?" Businesses that have higher risks of liability or higher assets should often consider Umbrella Insurance, as well as businesses working with a client or a contract that requires higher limits. Having Umbrella Insurance can also help businesses on a budget, as it can extend the liabilities on multiple coverages with one policy!

Here are some businesses and scenarios where there is a higher risk of liability and Umbrella Insurance should be considered:

• Businesses working with expensive equipment - such as Contractors

• Businesses with a lot of foot traffic - such as Retail or Restaurants

• Businesses that use automobiles or drive frequently

• Nonprofits

• Consultants

• Accountants & Financial Professionals

• Healthcare

• Home-based businesses

At Foxquilt, we believe that each business is unique and deserves insurance solutions tailored to their needs; Commercial Umbrella Insurance is no different. We recommend talking to an insurance professional to help answer, "Does my business need Umbrella Insurance?" Our team of experienced professionals can help look at your business and provide you customized insurance. You can even access exclusive discounts on your insurance by joining the Foxquilt community! Get started today.